This week in NatureTech #43

💬 Niche of the week - Vertical Farming an Aeroponics Renaissance?

Once thought to be a silver bullet for all our food security woes, Vertical farming had a brutal couple of years with some high profile bankruptcies. The sector is not going away, but it is evolving much slower than most expected. Armed with the battle scars of the first wave of VF, leaner, meaner and greener VF operators are emerging. Let’s take a deep dive.

The challenge:

• We need to feed more people: We will need to increase food production by 70% to feed 10 billion people by 2050. 

• We need to feed people from less productive land: To meet demand, global crop yields will need to double in the next 35 years, but we are losing 24 billion tons of fertile soil per year due to current agriculture practices.

Unpicking Vertical Farming - Aeroponics

• The promise: VF Aeroponics is a soil-less growing technique that suspends crops in stacked indoor systems periodically misting them with a nutrient-rich water solution.

• The results: The approach has demonstrated the ability to use up to 95% less water use, enable 2x faster growth, and 10x more crops per ha than traditional farming. (Read more)

• The shortcomings: Despite great excitement, In North America and Europe, the majority of large-scale vertical farming projects launched since 2018 have either failed, stalled, or been forced to pivot. 

What happened?

• Brutal unit economics: Infrastructure-heavy operations require $10 million per acre facilities before generating revenue. Energy to light and climate-control facilities are also eye-watering accounting for up to 40% of operating costs.  Many of the most high-profile failures in vertical farming wave 1 stemmed from scaling before achieving unit profitability. 

• Flawed assumptions about consumer willingness to pay: In the first wave of VF, many producers were playing in the leafy greens space (Lettuce et al.). Many of these crops retailed at $2/kg Vs the  $8/kg required by VF operators for profitability. Assumptions about consumers' willingness to pay a premium for ‘organic’ or ‘ultra-local’ didn’t hold true.

• Tech focus over operational excellence: Many players focussed on developing the best tech solutions and trying to  “out-innovate” their competitors with sensors, AI, and proprietary systems. Sidestepping core questions about: How can we be a highly efficient farm operator? Who is buying the product, at what price, and through what channel?

Tailwinds & who will win going forward?

• Focus on high margin crops, with short shelf life: Focussing on premium product segments - such as strawberries and microgreens – where cold climates and import reliance create demand for year-round local supply. Providers are also focussing on inputs  for pharmaceuticals - where very specific growing conditions are required. (Example: Oishii, growing premium strawberries)

• Tapping into market intelligence: Rising urban middle classes and growing concerns about food security and supply chain resilience are converging in cities like Tokyo, Shanghai, and Singapore. These factors are also creating significant sources of non-dilutive government funding for vertical farming operators (E.g. Singapores 30×30 plan).  Winners are investing heavily in market intelligence to spot opportunities like these which create favourable crop margins and regional demand.

• Ruthless focus on cost before scale: Operators are exploring a variety of models to tackle costs: For For example, building in brownfield facilities to reduce upfront costs (E.g. Group farms) ; operating hybrid greenhouses that use natural sunlight to cut down on energy costs (E.g. Sky Greens) ; or offering lean, modular facilities that allow scaling once unit economics.
  

  

Three to Watch:

1. AeroFarms (New Jersey, USA) Turned around from bankruptcy in 2023 to become profitable. Now supplies 70% of the retail microgreens market to retailers like Whole Foods and Costco using proprietary aeroponic systems.
   The latest: Profitable for two consecutive quarters; Operating 140,000 sq ft Virginia facility 

2. Plenty Unlimited (Richmond, USA) Emerged from Chapter 11 bankruptcy in May 2025 and pivoted entirely to strawberry production.  Nearly $1 billion in previous funding from Jeff Bezos, SoftBank, and Walmart. 

3. Intelligent Growth Solutions (Edinburgh, GBR)  Ranked #11 on TIME's "World's Top GreenTech Companies of 2025" list. Operates as a pure technology vendor designing industrial-scale vertical farms globally. 

💬 Snippets for your lift conversations

💻️ Tech:

• Leading figures from RSPB, Ecologi, and Unilever co-found new non-profit to link businesses with UK nature restoration projects. (Read more)

• Texas startup sells plastic-eating fungi diapers to tackle landfill waste (Read more)

💼 Big business:

• AWS invests US$4m in Swedish wetlands to enhance biodiversity and flood protection. (Read more)

• Bespak partners with Tunley Environmental to complete their inaugural Supply Chain Biodiversity Footprint assessment, reaffirming commitment to sustainable practices. (Read more)

• Amey's new 'Nature Positive' strategy integrates biodiversity in transport, defence, and more, aligning with UK environmental goals. (Read more)

🏦 Finance:

• Swen Capital Partners raises €160 million to support ocean biodiversity startups. (Read more)

• AXA Climate and FTSE Russell have developed a 'first-of-its-kind' sovereign bond index that integrates nature- and biodiversity-related risks. (Read more)

📝 Policy:

• Brazil aims to restore 12 million hectares of native vegetation by 2030 as part of its biodiversity strategy. (Read more)

• Vanuatu and the Solomon Islands announced plans to create the world's largest Indigenous-led ocean reserve, with Papua New Guinea and New Caledonia ready to join. (Read more)

• Two French organizations and a Nairobi-based company collaborate to develop a framework for scaling the plastic credit market in East Africa, addressing regulatory and financial gaps. (Read more)

🎣 Deals

• Puro.earth, a leading carbon-crediting platform for engineered carbon dioxide removal (CDR), today announced it has raised €11 million in a Series B (Deal)

• Orchard Robotics Raises $22M in Series A Funding for their OS for precision crop management (Deal)

• SuperGround completes €3.65M funding to upcycle food waste into new compounds(Deal)

• Cambridge-based Xampla, creator of natural materials for commercial use, has secured $14 million in Series A funding to accelerate its mission to replace single-use plastics with plant-based alternatives. (Deal)

50+ Startups are raising >$100mn in our network this year - get in touch to hear more

📆 Events

🇨🇭 European Venture Fair 2025 11th September (Attend)

🇸🇪 The Drop 15th September - We’ll be here shout if you are also attending (Attend)

🇩🇪 Impact Festival 17th September (Attend)

🇬🇧 The Heat 19th September (Attend)

🇺🇸 Climate Week NYC 21st September - We’ll be here shout if you are (Attend)

🇬🇧 Future Food-Tech Summit 24th September (Attend)

🇦🇺 All Energy Australia 2025 29th September (Attend)

 🇬🇧 London Climate Tech Show 2025 1st October (Attend)

🇬🇧 Climate Tech Summit 2025 1st October (Attend)